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tv   Squawk Alley  CNBC  February 25, 2016 11:00am-12:01pm EST

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director's testimony from aman in washington. >> good morning, a very careful fbi director that we saw on capitol hill today. he said this was not about the fbi trying to establish a broad precedent here. in fact he said the technology itself would be a limiting principle going forward because this case would only apply to one phone and one piece of technology. his very careful remarks throughout the morning. very much trying to be the reasonable man in this debate. >> when i hear corporations saying we're going to take you to a world where no one can look at your stuff part of me thinks that's great. i don't want anybody looking at my stuff but then i step back and i say law enforcement which i'm part of really does save people's lives, rescue kids, rescue neighborhoods from terrorists and we do that through court orders that are search warrants and through search warrants of mobile devices so we'll move to a world where that is not possible
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anymore. it will be a different world than where we are today and where we are in 2013. >> he was also careful to offer up words of praise for apple. take a listen to what he said on apple. >> no demons in this dispute or the larger dispute. apple has been very cooperative. >> he was offered by one congressman the opportunity to repeat the government allegations this week. it's part of a larger marketing decision. comey did not take that opportunity to understand what apple is about here in this debate. you really just have to ask apple. he himself sort of held back there the opportunity to go after apple the way the government had gone after them last week. so an interesting evolving debate here. >> yeah. a very interesting tone as well. thanks so much for that. as aman said 24 hours remain for apple to respond to that court order. tim cook took to abc to explain
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why he is concerned. take a listen to that. >> we had no more information. the only way to get information at least currently the only way we know would be to write a piece of software that we view as sort of the software equivalent. we think it's bad news to write it and we have never written it and that is what is at stake here. >> joining us, former fbi assistant special agent in charge of cyber, now with the corporate investigations and cyber security, defense firm k-2 intelligence. it's great to have you, good morning. i know you're not on the team here advising the tone of what comey should take but did this seem like a step away from the clash we have seen play out in the press? >> no, i don't think so. i think it's, you know, director comey understands that this is a long-term battle. and the only way to do it is through the public-private
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partnerships. he doesn't want to make enemies with apple. they have to work together to cure this. >> this notion that there's an inherent limiting principle in the technology because of the way phones are continually changing. and the fbi specifically have been battling something they call the dart which is over the years aztec nolg develops and the regular tools they use at their disposal. we don't generally think of court orders or companies for people being optional but we have seen never a court order that's requiring or compelling a company to create something that it doesn't have and the danger of this when tim cook talks about it, the way you don't allow the risks that would be inherent in the software is to not create it. how wide is this here between the fact that this doesn't exist and the fact that apple would have to create it?
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how could government make them do it? >> in this instance we have to focus on this one phone. that's what the fbi is asking for. for them to develop some software that will allow the fbi to break the pass code. now we don't know if it's a four digit pass code, six digit, multi. a four digit pass code versus an 11 digit pass code could mean years so with this specific instance we have to focus on this phone. we're not saying that apple is going to make software that can be easily translated to all the phones out there. we have to focus on this one instance and this, in my opinion, is a case of national security. talking about a terrorist phone, possible communications with other terrorists out there. >> you talk about the four digits, 11 digits, part of comey's testimony today is we're not the fbi you see on primetime tv. kayla asked if that was
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self-debrication or we overestimated their ability to hack into anything. >> what the public sees of the fbi is through tv shows and movies. the fbi and the government can only do with the tools that they have in their arsenal against the technology. in this instance there is no way that the fbi can get into that phone without the assistance of apple. >> no matter, no matter how long it takes? you're saying it's really -- it would be one thing if they said we don't need your help and it's going to take us another year. you're saying that can't be done. >> that's for unlocking with the pin code. so they need apple to basically install something on that phone. basically a new operating system. and then they have to sign it with apple's digital key so that the phone recognizes that it's from apple. it has to come from apple. that update will disable the security feature. the ten attempts before wiping and then and only then can the fbi then start using computing power to go ahead and try to
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break that. >> obviously you're coming at this at the approach of the fbi. and see how they work behind the scenes. and when tim cook says i don't fear a slippery slope this is one. can you see where he is coming from on that? >> in the end we have to come down on the side of law enforcement. tim cook talks about the future and civil liberties. well, for the victims of that san bernardino attack. unfortunately it's out. we have to do what we can to identify further attacks and who they're communicating with. so it is a slippery slope and there's no doubt. i think this battle is going to be a long one. and there's probable cause to
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believe that there's activity on that phone. >> so you sound like the fbi's argument is we realize we're saying it's this phone but it could be a different phone next year after another attack in five years. it could be a different sort of request. they're not denying that, right? >> they're not denying it and there's no doubt that if apple is compelled or agrees to do this there's plenty of other jurisdictions that are going to ask the same thing of apple to do. >> there's no clear majority of public opinion either in favor of the fbi or apple and we had wondered for years what would be the issue. what would be the event that finally bridged that gap. if not san bernardino. if not 14 people dying, what is the scale of the event that you would finally break that gap? >> i don't think there's a better example than this. you're talking about terrorist attack on u.s. soil.
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and if an fbi agent had a search warrant for a home and gets into the home and has a safe that's locked. they are going to go back and get a search warrant for the safe. this is the same thing. they're doing an investigation. they hit a road block and need assistance to continue this investigation. >> the toughest question he has seen in government. i assume you'd go along with that. >> absolutely. yes. i agree. this is something that's going to be decided through congress and i believe at the supreme court. >> we hope you'll come back as the story continues to change. thanks very much. >> check on the markets, the dow has just gone negative. it's back across the positive line and it's a fraction of a percent. .01% and the s&p and the nasdaq are still negative. oil a big reason that the market had been selling off in addition today at a that we got earlier
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in the morning. we'll keep you posted on the moves there in. salesforce with a nice gain after better than expected quarterly revenue. the stock is up sharply up 9% and shares of hp inc falling after a larger than expected revenue drop. analyst expectations and you can see what that's doing down 7%. >> best by shares after earnings top estimates. what to expect for the rest of the year. will apple's fight against the government impact the stock. and then netflix the sequel to crouching tiger hidden dragon premiering on streaming and in theaters tomorrow but you'll have a hard time finding it on the big screen. what that means when squawk alley continues.
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>> for more on best buy let's bring in our retail analyst at jp morgan. it's easy to look at the stock being up today and say maybe the quarter wasn't so bad but a large part of that was the capital return that the company announced. how are you factoring that? ? >> there's two things going on with the stock. you're seeing a lot of this heavily shorted on stocks. squeezing up and they're out
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performing. the second is the capital allocation. they brought back more than expected in the fourth quarter and they announced the increase to the dividend and then yielding at about 3.5%. >> what's your interpretation, chris, of how the quarters sales went? we did see same store sales dropping just shy of 2% for the quarter despite the fact that holiday sales were actually pretty good and now best buy says we're not even going to do holiday sales anymore because january is so important and you have head winds because of the mobile business. the ooirks phone 6 wasn't good for them. you see the tv business which reflected positively in 2014.
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now and tv went from negative to positive. and it's the concern we have as you look at the upcoming year. >> chris, every retail report card seems to have a big line in there online. up 13-7. is that traction? what is the big line on what is traction now? >> if you look at on average online sales across all the categories and they're growing in the low to mid teens so for best buy that's pretty good. they're growing in line with the market. if you look at their overall penetration, about 11% of their sales are actually online. if you look at the industry and it's a great job and very good management team and really establishing it online and competing against amazon so they're slowly and gradually
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getting to where they should be at this point today. >> so as they shift and become more of an online retailer, do you think that's the issue and that people just aren't as willing to buy something like a phone or a tablet that you can't hold or play with in the store. >> the bigger issue is just what happens with product adoption phases. you have tablets which are down for the industry and in the 30% range in 2015. you just haven't had the innovation from apple to drive a replacement and simultaneously you had something like with the iphone where iphone 6 was, you had two different sizes. you had a big adoption phase and this past christmas it was really difficult for them. it's highly uncertain you're expecting a back half recovery and they're expecting the back half recovery and that's highly
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dependent on apple putting something compelling on the iphone side and tablet stabilizing and maintaining share in tv which is the hard part. >> we know that cycle is about to ramp up. we'll see how best buy fairs which is also the ties of the morning. chris we appreciate you joining us this morning. >> thank you. >> up next, as the apple story rolls on, many worrying about security everywhere and that includes public wifi. we'll talk about that with the ceo of gogo. the company that powers wifi for a ton of different airlines when we come back. plus the sequel to crouching tiger hidden dragon hits theaters and netflix tomorrow. won't be so easy to find on the big screen. we'll tell you why that is when we come back.
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>> a recently dropped lawsuit from american airlines and a story highlighting the
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vulnerability of service in flight. what is next for wireless in the skies? michael is the ceo and joins us this morning. it's good to have you. good morning. >> glad to be back. good to be here. >> quarter got overshadowed by this american lawsuit. now dropped. where does it stand now. the relationship between gogo and america. >> we had a great relationship. actually our customer in 2008. where it stands is we are going down to dallas to prevent them an offer for our new solution. this is an open solution. we think it's the solution that best captures the rapidly falling cost and improving bandwidth in our industry and we're excited to share that with them. >> when you have to explain to people the reason for the dispute, what do you say?
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it's very straightforward. it wasn't adequate for some of their larger aircraft that flew more distant locations and they need to do an upgrade. it's very natural that american would consider all of their options and want to make the smart choice and we'll be in there saying why gogo has the best plans for the future. it's what we have for tomorrow and our open solution is the right answer talk about how that in with facebook putting drones in the sky, there's a lot of big companies trying to tackle this very problem so you guys either need to innovate or the fate of your company is going to fall into one of their hands perhaps. >> that's the interesting thing
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what we mean is our satellite antenna are open to work from many of the satellites from many of the world's leading companies. what we want to do is harness that innovation of others and we'll work with whatever the solution may be. there's constellations and even balloons so our antenna is ready to take advantage of all the various innovation. >> in terms of long-term growth everybody knows the forecast for commercial aviation around the world. it's amazing how many more people will be flying in 20 years. at the same time you get a story today like this one in usa today about the reporter working on a story on a plane. turns out someone was able to see his information. how much are you going to have to fight the perception that you're activity while in flight
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is not safe? >> security and privacy are huge issues. we run a wifi hot spot and we actually enable vpn so people that want to have an option and increasingly websites are going to secure and help the situation. we do everything we can to maximize security and privacy in our offerings. >> and what about customer service to that same effect michael? because there's still people who feel that in 2016 if they board a flight they pay for gogo. it should be work and it should be past the entirety of their trip. in a lot of cases that's still not happening. >> absolutely. we pioneered this industry and the solution we introduced in 2008 is now at capacity and is not as past as anybody wants so
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we're introducing the next generation and we will move to the world of affordable bandwidth. who has the best solution for the future and we are saying 2ku is the answer. >> finally is the sweet spot of growth coming from short haul versus long haul? international versus domestic? where are you seeing the most growth? >> yeah. we're seeing it everywhere and, you know it's hard to find a spot on the earth where people don't want to be connected or in the sky and it really doesn't matter. we're actually these days doing a whole bunch of regional jet installs. it just happens to be the case but our backlog is increasingly global aircraft but it's just a
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matter of time until all the world's aircraft are connected. >> how many years are we talking? >> i think five years from now it will be hard to find an aircraft on a major airline that isn't connected. ten years from now it will be hard to find an aircraft anywhere that isn't connected. >> that's amazing. good to see you. thank you for shedding light on the quarter and the recent news developments. >> thank you. >> the sequel to crouching tiger hidden dragon hits netflix tomorrow but it won't be so easy to find it on the big screen. julia joins us to explain why exactly that is. >> hey, kayla. good morning. crouching tiger hidden dragon sword of destiny will only be shown in about a dozen imax theaters. in 2014 netflix announced what sounded like a ground breaking deal. teaming up to produce the
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sequel. the plan is today beau it on netflix and a limited number of 400 theaters. and cinemark and carmike won't play it nationwide. the vast majority are joint ventures with the chains. the idea is it undermines the theaters business to accept films that are not exclusive to movie theater screens and they don't want to set a precedent. still there's questions about whether these big chains are leaving money on the table. back in 2000, crouching tiger hidden dragon brought in $128 million in the u.s. it's the highest grossing foreign film ever at the u.s. box office and in china where netflix is not available the film did have a wide release and grossed $21 million in it's opening weekend. now meanwhile, imax may wish it had a little bit of an extra box office boost this weekend. shares are down sharply after
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weaker than expected earnings after the bell. back over to you. >> julia, thank you so much. when we come back, we have talked a lot about apple today and this fight against the government but is the case having any actual impact on the stock? right around 96 this morning. gene is going to talk about that element of the story when we return. here at td ameritrade, they work hard. wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade.
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>> spanish police arrested a man
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in spain accusing him of promoting islamic militancy via social media. the arrest comes after a joint operation by police earlier in the week that detained four people. north korea state tv airing video of a banquet helped to celebrate the country's successful rocket launch earlier this month. it featured kim jong un and his wife cheered by officials as they entered the banquet hall. >> several packages of raw nuts could be recalled. the products were sold between july 2015 and february of this year. no illnesses have been reported. and jcpenney is slashing prices all the way down to a penny. recently launching it's get your pennies worth marketing campaign. they're looking to get much needed foot traffic into it's stores. that's our news update at this hour. let's get back to squawk alley.
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>> i can't wait to see the margins on that. thank you very much. let's bring in simon hobbs and get europe's close. german dax, the best day in a week. >> it's a real good finish at the moment. check out the figures on the screen. green, descent bounce back and a lot of it assisted by the fact that oil, brent, as far as the europeans are concerned rose at about 4:00 our time yesterday. they had some catch up to do but it's broad based as you can see. meantime you have had an inflation figure come out for the euro zone. a downgrade on where we thought we were to 0.3% year on year for the euro zone. if you look at where energy prices is going it's likely that will be flat next month and a negative headline figure for march. it all feeds in of course to the idea that the ecb will be aggressive with, people hope, a super bazooka when they meet two weeks from today. in this environment you have a continued very strong rally on
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sovereign debt and everybody is in on that apart from the short end where you have negative rates. the prices continue to go up. the yields continue to go down and you see the yield now on the german bund at 13.8 basis point which is is not very far from the five basis points we had back in april when bill gross called it the short of a lifetime. yields went higher and now we retrace that because people believe they will cut the deposit rate further into negative territory when they meet in two weeks time and that will enable them to buy more bonds, more assets and push those prices higher. citi maintained it's european equities. it now says they're yielding 250 basis points above your average foreign debt in europe so people will be forced into the stock market. as far as the u.k. is concerned, still sterling is sitting just below that long-term trend of $1.40. today u.k. prime minister david cam ran took to youtube in order
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to press his case for britain staying within the european union. interesting as far as city is concerned they're now underweighting u.k. equities as opposed to the rest of europe because of the risks that britain will exit the european union in june or at least vote for that. as far as the stock market moves are concerned it's a lot of the u.k. financials. it's still state controlled arguably from the government, they have a special dividend. it begs the question whether the government will sell more of its stake. coming through with cost cuts above expectations which has lifted others. two weeks ago and the ecb. >> thank you so much. meanwhile tim cook defending apple's encryption fight against the government. in an interview cook saying the public spat but apple in what he says, a quote, uncomfortable position.
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take a listen. >> this is not a position we would like to be in. it is a very uncomfortable position. to oppose your government on something doesn't feel good and to oppose it on something where we are advocating for civil liberties which they are supposed to protect it is incredibly ironic. >> should apple investors in light of that begin to feel uncomfortable too? gene, the stock has been up slightly since this became a public conversation but there's no sense in how this will resolve itself. is it too soon to start talking about the brand impact on apple? >> no, it's the right question to ask because that's what investors want to know is how is this ultimately going to impact sales. if you look back, security has always been part of apple's
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brand. whether it's secrecy around new products or apple pay and the data. this isn't a surprise but we did do a survey of 1,000 people in the u.s. last weekend and asked them how has this impacted your outlook on apple's brand and it was a total wash. 25% of people, typically younger people said it's more favorable. 25%, typically older people said it was less favorable. they should be complying with the fbi and 50% were either indifferent or didn't know. so if you use that as a leading indicator even though this is a great topic to discuss it ultimately probably is going to have little impact. i would note is that outside of the u.s. where governments are less friendly i think this probably, we haven't surveyed this but i suspect that they'll view it a little bit more favorab favorably. so you'll have to put it on one side or the other and it's probably slightly more favorable
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longer term. >> it's been an apple sen trick conversation because this specific request involves apple and we have seen other leaders in the tech industry, mark zuckerberg come out and stand with am but you have to believe that within alphabet headquaters the conversations at google and about android must be looking at this and they must be thinking what's in it for us. how does that play out? >> from apple's perspective what's in it for them is they're trying to do the right thing but also it's part of their brand. that's an important reason why people like iphones and that's very different than what happens on your android phone. i think google is a great company but they use your data to monetize that through advertising and so they are less secure. i don't think that's any -- or less private. i don't think that's any surprise to anyone. and so i think even though these tech giants have been generally standing by apple the irony is
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that companies like google and facebook actually are okay with allowing a little bit less privacy because that will help them make money. >> this is obviously a thin sample to bet a stock thesis on and it doesn't give us a window as to what the reaction might be in a place like china, right. >> exactly. >> i think outside of the u.s. this is probably going to be more favorable. that's the future work that we're going to have to do is to see what the brand impact is but i suspect that's going to be slightly more favorable because of how they view the government. >> we have an event in a couple of weeks where apple will be unveiling new products. we'll get the iphone 7 in a couple of months. how high priority is it to make sure that those devices and that iphone 7 in particular is a black box? >> i think it's critical. again it comes back to one of the things that apple does really well is kind of protect your privacy and so i think that that's why tim cook is fighting
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as hard as he is and ultimately i think that it's probably going to go much higher nup terms of the courts to figure this out so i suspect that the iphone 7 will be just as secure. they're probably not going to institute some sort of a back door into the phone and i suspect that apple will be able to continue to maintain that they're fighting for your privacy. >> is there any more negative situation that you could imagine, gene? there's a lot of people and experts that expect this is going to go to the supreme court. this won't be resolved for years possibly but is there a situation where this gets resolved earlier and perhaps less favorably for apple? >> well, if it's resolved less favorably for apple that's going to impact every phone that's out there. so from a consumer standpoint, just less differentiation out there so you can argue that since that's one of the reasons why people like iphones, maybe that card gets taken a little
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bit away from apple. so that would be a slight negative for them. but ultimately i think that people realize that apple is fighting for them. and that's the importance of what tim cook is doing and they are building some form of good will that they're looking out for the average consumer. >> we're in the very beginning of trying to glean the impact on this company. so thank you for helping us to that effect. >> thank you. >> when we come back, threats against mark zuckerberg and jack dorsey coming from oversees. what you need to know. but first, rick santelli, what are you watching today? >> much of the policy around the globe to try to fix the low product activity issues that we face may not be working but one thing is for sure, it's that people have a pretty good sense of what makes them feel comfortable and what doesn't and we're going to talk about some issues in japan that might make
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you think about what lies ahead. especially what's in your wallet after the break. know your financial plan
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won't keep you up at night. know you have insights from professional investment strategists to help set your mind at ease. know that planning for retirement can be the least of your worries. with the guidance of a pnc investments financial advisor,
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know you can get help staying on track for the future you've always wanted. coming up on the halftime show what a flurry of earnings tells us about the strength of the consumer and plus the brothers and the oracle. digging through warren buffet's portfolio for the name they think he should dump and they don't agree. how much pain should be ahead
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for the financials if oil continues to slide. five star fund manager joins us to discuss. we'll see you soon. >> sounds good. thanks scott. supporters of the islamic state releasing a new video featuring and targeting jack dorsey and mark zuckerberg. josh is live with more. >> tech companies are under pressure to aid and assist law enforcement in the fight against terrorists and in many cases they have. earlier this month twitter confirmed it suspended over 125,000 accounts for threatening or promoting terrorists acts primarily related to isis since the end of last year and now supporters of those terrorists are responding to the executives of the tech firms. a group of islamic state supporters that calls itself sons of the army released a video in which photographs of mark zuckerberg and jack dorsey
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can be seen riddled with bullets. they claimed to hack thousands of facebook and twitter accounts that ended with a message that said to mark and jack founders of twitter and facebook and to their crusader government. you announce daily you suspected many of our accounts. we say is that all you can do. you're not in our league. if you close one account we'll take 10 in return and soon your names will be erased after we delete your sites. dorsey has been the target of threats from isis supporters for sometime and both twitter and book did not respond to a request for comment. back to you. >> crazy story guys. thank you so much. let's get to the cme group this morning. rick has the santelli exchange. >> good morning, carl. the theme today's negative interest rates and truly this is an issue that needs to be discussed every bit as much. maybe more than some of the apple issues that have dominated the news cycles as of late and
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thus far i can't really find any positives on negative rates but there's one safe issue regarding negative rates in japan that i found rather fascinating. now i know it's a bit anecdote but i think it's okay. i'll tell you why. much of what makes the global economy hum along or the domestic economy is the citizens ability to interact with the various markets and rules of the markets and various aspects of our society. so if you make people uncomfortable or lack confidence it will show up in their behavior and their behavior will effect our economy. it's just like recessions. the more you talk about them the more people worry about them. maybe the higher probability that you'll see one. so the one safe snu japan on negative rates is ability a safe. i find this story so fascinating. you can put it up on the screen. this is from a couple of days ago. japan's negative interest rates
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are driving up sales of saves. now it's not a very long story but basically what it says is after rates were pushed negative on the 29th by ten basis points by the japanese and mr. koroda that the sales of saves in certain areas and chains of hardware stores have doubled year over year. does this sound like a citizen that is enamored with this? it sounds like a nervous behavior that's popped up. it gives us unsight into how unprepared or unvetted people are in countries welcoming negativity but it isn't just that. many times we have to connect the dots sometimes. okay. there's been talk right on cnbc about breaking up the banks. same banks we bailout by the way
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and wasn't a voluntary process either. whether it's larry sommers or many around the globe, waging a war on cash. now i ask you with this apple story, do you think that we should maybe put a little aside in case something happens with atms or there's hacking? this is about cash. i can't imagine people are going to behave in a fashion that will make them spend more under this notion. so negative rates coming into the united states; i don't know if it's coming but we need to try to educate people as to what it means for them and hopefully let's also monitor sales of saves. kayla, back to you. >> all right. rick, thank you. coming up, imagine someone tapping you on the shoulder and reading your private e-mails out loud. that's what happened to a usa today reporter. he'll join us next on his work on apple and the fbi.
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the apple and fbi topic became personal for one columnist when he got hacked while writing about the same story he was using gogo's public wifi. he is joining us this morning and a fascinating column. good morning to you. >> good to talk to you carl. >> for those that haven't read it can you tell us what happened? >> yeah it was friday night. i was on an american flight. i signed up for the gogo service and i paid my money and started
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to do work e-mail. i happened to be working on an apple fbi story trying to understand what the privacy implications could be for ordinary americans. people like my mom who is a retired social worker and a friend that works in retail and i have a niece in college. so much of this debate is about principle and i wanted to learn more and when we landed this gentleman in the row behind me said i need to talk to you and i looked at him and i said to myself it's midnight. it's time to go home and then he said not really and then he said you're a reporter aren't you? and then i said how does he know that. so he told me to wait for him and i did wait for him when we got off the plain and before i had the opportunity to even ask him how he knew i was a reporter he said so i understand you're interested in the apple fbi story and i have to tell you then i thought either he's a mind reader or i'm going to freak out and he spilled the beans. he said that he had hacked into
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my account through the gogo service. he had hacked into many others on the plane. he had read those e-mails and then he recited pretty much verbatim back to me what i had written to this one security expert about wanting to understand about privacy and he said so here's your lesson. your back door was hacked and i violated your privacy. he said the good news for you steven is, you know, you didn't do a financial transaction and you weren't looking to hire a hooker. but i did think to myself. i have health records and other legal matters that i care about. i have things that i want to choose to keep private and he had taken that decision out of my hands which seemed to be the real violation and, you know, the potential ramification of this story to ordinary people. >> steven he wanted to teach you a lesson and thankfully you weren't doing a financial transaction but what was he looking at everybody else that they were doing? who was this guy?
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>> well as it turned out this guy is a felon and he has multiple felony convictions for some gun charges and some drug charges: he told a colleague of mine yesterday that he just downloaded this android app that allows him to do this kind of hacking so he was kind of playing around and he wanted to teach me a lesson. he wanted to see my face when he shocked me with this news. i wish he had a picture of that because i'm sure my face fell to the floor when i learned that he had been in there. >> what was the app? what was the android app and why not take him to a local precinct. >> i don't know what particular app it was. i talked to a couple of my sources and they don't seem to know whether, in fact, this is an illegal act.
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and the paramount question is that americans need to recognize we all have privacy concerns. we have things that we want to choose to not tell others and when we're going to do that we're going to make that decision. that's what i learned. technically i learned some things too. i have a vpn on my computer now. i'm going to dump earth link. i'm not going to use gogo anymore. >> really? it's not a matter of flying and restricting your activity. you just -- the fact that you exist on their network is what puts you in danger? >> absolutely and, you know, i had a quote from the ceo michael small in my story who i know you just interviewed and he said, you know, it's not safe. you need to have additional protections like a vpn and i think that most people don't know that when they sign on to these public wifi spots. they think it's secure. it's my bad for not knowing better but i'm telling everyone now don't make the mistake that
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i did. >> lastly, is any different than going to your local starbucks or mcdonald's and using their network? >> it's no different at all. we're all in danger in these places and when we look at devices coming down the road. cars, smart refrigerators there's the potential that there will be back doors built into these devices too so this is not just a debate taking place in washington it needs to take place in every household. >> it's a good read. everyone should look at it. thank you for your time today. when we come back, a clue into how amazon is scooping up big stars and movies for original content when squawk alley continues.
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woody allen is set for a big payday. the hollywood reporter revealing that amazon paid a staggering $15 million for his next film sight unseen which is more than his last two films grossed combines as amazon continues to pay up for that at sun dance. my favorite stat today is to buy one of everything that amazon else is. you would need $12.8 billion.
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>> someone has too much free time on their hands. >> curtesy of usa today but obviously content getting more and more expensive. >> to be spending that much money if investors thought margins were getting thicker they're probably out of luck. >> retail is a big story today. best buy doing all right. sales force is up almost 9% as we get clues that maybe enterprise spending hasn't gone away completely. >> we got earnings from bank rate as well. rate. it's not a company that we talk about a lot. financial information provider. relies on advertising and this is what happens when you compete with google. when google searches for financial information starts to eat into your business. stock down by nearly half today. >> it's going to be a big day for apple. we talked about the fight with them and the fbi all morning long. tomorrow is not only the deadline for apple to respond to that court order but also the annual meeting if you can believe we're coming up on that
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season again in cupertino. it will be a busy day for apple no matter what. >> i wonder how much of that conversation will center on the company, the earnings and it's massive business. >> let's get back to headquater and the half. >> carl, thanks very much. welcome to the halftime show. and the option monsters are here too. john and pete, our game plan looks like this. john and pete go combing through the or the foil owe for the one stock he should kick to the curve. how much pain is ahead for the bank ifs crude keeps getting crushed. the investor weighs in on that key question. we begin with what could be another big one facing the economy and the stock market. whether you the consumer i

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